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Friday, 8 August 2014

On May 28 of
this year, Philadelphia District Attorney R. Seth Williams charged a South
Philadelphia auto body shop owner named Ronald Galati, Sr. and a group of 40
co-conspirators in a nearly $5 million insurance fraud scheme. These charges
were the result of a 16-month Grand Jury investigation of American Collision
and Auto Center at 1930 S. 20th St. According to prosecutors, Galati would
stage single-vehicle accidents because insurance companies consider
them “no-fault” and routinely pay the claims without raising the car owners’
premiums. According to Grand Jury witnesses, Galati would say, “I live my life
to cheat insurance companies.” Among those arrested were a former Philadelphia
police officer, Douglas DiEmidio, and a mechanic with the city’s Office of
Fleet Management, Robert Otterson.

Upon reading
this story, I could not help but reflect on an episode in my own background
that was a virtual carbon copy (remember carbon copies?) of this one. It took
place around 1972, when I was a reporter for the Philadelphia Tribune, the
nation’s oldest African-American newspaper. I had written several times about
an insurance agent in West Philadelphia named Warren Scruggs, and he would
occasionally call me with suggestions for legitimate human interest stories.

Warren
always dressed in expensive suits, drove high-octane cars and generally gave
the impression of being a mover-and-shaker. He was always dropping the names of
“friends” who were highly connected politicians, athletes, business executives,
media personalities, etc. He ran for City Council himself once as a Republican
but lost badly.

He and his
model-thin lady friend, Barbara, took my wife and me out to dinner a few times
to an upscale steak-and-seafood restaurant on City Line Avenue, where he handed
out big tips to valet parkers, servers, managers, etc., as if they were
after-dinner mints. Naturally I assumed Warren, who was a big guy with a big
personality — always laughing, slapping you on the back, etc. — was mega-successful as an insurance
agent.

Then one day
Warren called me and said he had a proposal for me. “I know you don’t make much
money there at the Tribune, and I know you put in long hours,” he said. (At the
time I was paid about $150 a week before taxes, and I was working at least 50
hours a week.) “Well, I have a way for you to make about a couple months’ pay
or more, and it will require very little work, just a few hours. I have quite a
few other people involved, and I thought you deserve to be in on it, too. Want
to hear more about it?”

Does a
giraffe have a long neck? How could I say no? So here is the gist of what
Warren said:

“All you
have to do,” he said, “is drive down Chestnut Street between 52nd Street and
30th Street on the day and time that I tell you to do it. You will come to a stop
at a red light. Another driver will come up behind you and hit your car but not
very hard, just hard enough to put a small dent in your car. You will exchange
information with this person, who will be insured by the John Hancock Insurance
Company.

“A couple
days later a claims representative for John Hancock whose territory is West
Philly will come to see you to ask you questions about the accident. He will
recommend that you take your car to a particular repair shop to be fixed. You
will tell him that you have low back pain since the accident, and you will also
call a particular chiropractor whose name I’ll give you to get a series of
treatments for your back.

“After you
go for a few visits, the claims adjuster for John Hancock will offer you a
settlement, maybe $3,000 to $5,000 or even more if you sign away any future
claims against them. And they will pay your chiropractic treatments and the car
repair shop, of course, and they will be very glad to do so. A low back pain
case can drag on for years and possibly cost them a fortune, so they will be
delighted to offer you the settlement to get the case off the books. Then you
can go to Hawaii and splurge, which you can’t do on your newspaper salary!”

Warren
pointed out that the car repair guy, the claims adjuster and the chiropractor
were all in on the deal, of course, and all would get a cut of the action. I
would be lying if I said that I was not tempted to get in on it, too, but of
course I said no. I told my wife about the proposal, and she insisted that she
would not have much fun in Hawaii if I was sitting in a jail cell in
Philadelphia.

I did not
think any more about it until about 10 months later when the “Big Story on
Action News” was a press conference called by then-District Attorney Arlen
Specter to announce the arrest of 23 people, including insurance agents, claims
adjusters, auto repair shop owners, chiropractors, a medical doctor, etc.
Specter said his office had broken up a massive ring of insurance scammers, and
he would do his best to make sure they all did jail time. (Not many did.)